Definition
The lender's policy protects the mortgage lender's interest against title defects. It's required by lenders and protects their investment, not yours.
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Lenders require title insurance protecting their mortgage investment. Policy amount equals the loan amount. Protects lender but not owner.
Pro Tip
Lender's policy is required by lenders. Purchase owner's policy for your personal protection.
Example
Lender's title insurance for $320,000 mortgage protecting lender's interest.